Would you do business with a Minnesota Resident?
Tomthecoinguy
Posts: 849 ✭✭✭✭
Many on this board know that MN is still the only state in the nation that requires coin dealers to be registered. While it has a $25,000 threshold before the registration requirement kicks in, if you have just one MN customer, all of your sales and purchases count towards the threshold. They do have certain exceptions, like if your MN sales are all at coin shows, but for the most part it is a real mess, and I bet a lot of dealers don't even realize they are required to be registered.
So dealers on this board, what are your current policy's towards MN Customers?
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I thought only your MN sales count towards the MN threshold?
You're saying I gotta be registered if I sell a $100 coin in MN and all of my other $30,000 in sales take place out of MN?
If so, how does MN know my sales for all states totals over $25K?
No Way Out: Stimulus and Money Printing Are the Only Path Left
The way the law works, you are defined as a "dealer" if you sell something to a MN resident. However, the "registration" requirement does not kick in until you reach a total of $25,000 (sales and/or purchases). The threshold requirement does not have any limiters on the sales having to be in MN. I had my lawyers look at the law and this is what they told me.
Since I am a MN resident, it is even worse for me. Even if I am physically out of the state for every one of my sales I am still defined as a "dealer," unless I meet an exception in the law. Since I only do coin shows inside the state of MN, I am not a dealer under the law.
To answer your question, the way they would determine your out of state sales is they would send you a subpoena asking you. Then if you refused to answer they will subpoena your bank and ask for your bank records. I know because they did that to me.
They list their enforcement actions on their website, you can see they have taken action against dealers outside of Minnesota.
Join the fight against Minnesota's unjust coin dealer tax law.
As a ND seller we will not and can not do lock in business over the phone or ship to a MN address.
Also a MN resident cannot place an order through our website or ebay.
Since Oct, 1, 2019 ebay has been collecting and paying MN sales tax on behalf of ebays sellers.
I'm pretty sure this takes care of any obligation that ebay seller have as concerning MN sales tax. Correct me if I'm wrong.
No Way Out: Stimulus and Money Printing Are the Only Path Left
How does an ebay seller block just MN buyers?
No Way Out: Stimulus and Money Printing Are the Only Path Left
This doesn't have anything to do with sales tax. Some bullion products (pretty specific requirements) are exempt from sales tax in Minnesota. This is the required licensing, bonding, and background check for coin dealers. There are also some other onerous receipt requirements.
Interestingly, the ebay lobbiests added an exemption for them into the MN law, however the exemption only applies for auctions when you do not own the coins being sold, so it doesn't help their sellers.
Join the fight against Minnesota's unjust coin dealer tax law.
So, who is manipulating what and where, and why? For what purpose? Money or power is usually the answer so what exactly is going on here?
Ay'll tink 'boot it:
Thought that was only legal in Nevada...
My Saint Set
The origins of the law start around 2012, when a really big telemarketing coin company based in Minnesota, had their customer list (some might say sucker list) stolen by a rouge group of former employees. Those people then used the list to sell and buy coins but failed to fulfill their end of the deals. They basically just stole the money through fraud. (The people that inspired the law ended up going to FEDERAL prison.)
The MN AG saw this as a good opportunity to get some PR, she was really into publicity. Helping promote her efforts the MN newspaper ran a bunch of stories to pump up the issue. Some speculated that the reporter had relatives that were victims of the original scams. The big telemarketer that had their list stolen saw this as a good opportunity to create a barrier and get their smaller competition out of business. It also helped to keep other big companies from doing business in MN, saving the market for them selves. So the big MN company helped to get the law passed.
The legislature did not seem to take much care in writing the law, I was told they took a law that required dept collectors to be registered and modified that for coin dealers. This is when a number of lobbyist descended on the bill to make sure it did not hurt them. The law passed in 2013, and was later modified to broaden the scope, make it even worse for consumers and small dealers, and add some relief for big telemarketers.
The law served three purposes, it got small dealers out of business to help big companies, it generated revenue for the state to feed the bureaucracy, and it generated campaign contributions from lobbyists to feed the legislators campaign coffers.
The state collected money in licensing fees, that they used to hire more people to enforce the requirement to pay the fees. The legislators used the law to generate campaign funds from people that wanted to change the law. This is done through lobbyists. The lobbying firm's PAC makes big campaign contributions up front (someone from the firm hired to change this law told me they only make contributions to incumbents.) They essentially have the lawmakers on retainer, then the company that wants the law changed hires the firm with the lawmakers they need on retainer.
It is really just an awful cycle of corruption with the consumers and small dealers paying the price.
The whole law is blatantly unconstitutional, but it doesn't matter because if no one challenges it the whole scheme continues.
Join the fight against Minnesota's unjust coin dealer tax law.
How did you do that? IIRC when all this started I happened to be selling something on eBay. No way would I ever make enough sales to have this happen (I'm a hobbyist not a dealer) but I was curious. At that time it did not seem possible, even after talking to live people at eBay.
That is a really unfortunate situation. I’m guessing that the law has significantly harmed MN collectors, since most non-MN dealers probably don’t want to go through the hassle of registering in MN and just decide to not sell to MN residents.
Minnesota is a different place - interesting politics, interesting current and former politicians, interesting laws. I do like their lakes - Don't Ya Know.
Only attended one auction - that was before these laws kicked in.
Just did an online chat on eBay...they were not able to figure out a way.
Looks like the law is doing exactly as intended as it drives the MN coin business to the deep pocket coin dealers in MN. The law creates a risk for out of state dealers selling to MN residents. The MN Law makes it difficult for start up coin dealers as registration requires a bond from 25K to 200K . All under the pretext of protecting the MN coin buyer from a scam coin dealer.
As a born and raised Cheesehead, I normally don't care much for the land of the Viqueens.
This law seems to be quite punitive and an overreach to me. Time to clean house and get some intelligent people into state government.
“In matters of style, swim with the current; in matters of principle, stand like a rock." - Thomas Jefferson
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one would think that MN courts cannot claim jurisdiction over someone who never enters MN. No state legislature should able to pass such law giving themselves domain outside of the state's borders.
No Way Out: Stimulus and Money Printing Are the Only Path Left
Not sure how our accountant figured it out, but he was able filter MN address to cancel sales automatically. The taxes were not the issue, it is the sellers requirement to be registered and bonded with the state of MN to sell to MN residents.
The question to eBay needs to be rephrased thus, "I am legally ineligible to sell certain items to residents of Minnesota. How will eBay protect me from noncompliance?"
Keeper of the VAM Catalog • Professional Coin Imaging • Prime Number Set • World Coins in Early America • British Trade Dollars • Variety Attribution
Yes, the commerce clause of the constitution prevents a state from regulating a transaction that happens entirely outside of their jurisdiction. By MN counting the transaction that occur outside of the state, they are violating the Constitution. At least that is what my lawyer says.
hint hint
Join the fight against Minnesota's unjust coin dealer tax law.
ICTA has always championed eliminating sales taxes on coins. Are they involved at all with this issue?
Keeper of the VAM Catalog • Professional Coin Imaging • Prime Number Set • World Coins in Early America • British Trade Dollars • Variety Attribution
By doing business in another state may subject you to the jurisdiction of that state.
Come get me Minnesota! I've sold several coins to folks who live there in the last week or 2!
PS I have a long driveway that will take you more time to get to me than the time it will take me to be ready for you. You might want to let your agents know that!
Thanks for posting this, Tom. Best summary of the subject I've seen on the boards.
and yet govmint.com is still having national ads selling dreck for double value
Was in the twin draconian cities, once.
``https://ebay.us/m/KxolR5
RCTV: "Hold my beer."
https://www.rarecollectiblestv.com/1964-d-kennedy-half-dollar-ms65-fdoi.html
Keeper of the VAM Catalog • Professional Coin Imaging • Prime Number Set • World Coins in Early America • British Trade Dollars • Variety Attribution
Oh no ! I just sold a coin to a Minnesota resident on ebay.....
Maybe someone here can bail me out ?
I absolutely love this.
I live in Minnesota, and there have been several occasions when I've wanted to purchase coins online from out of state dealers. The sales were automatically declined at check out. In some instances these dealers have held the coin for me until I could meet them at one of the national shows at which time I'd purchase the coin.
One thing for sure, there will never be another ANA in the Twin Cities.
That was the company that got their list stolen, and they are the ones that worked with the MN AG to get the law passed in the first place.
Join the fight against Minnesota's unjust coin dealer tax law.
We lived around Bemidji for five years. I love Minnesota and my family and miss it time to time.
Rent was $450/mo when we first moved into our apartment in 2012 and quickly hit $600 by 2013 and was $850 when we left in 2015. It's 1300 today, 300 less than our 1ksq ft 3 BR in a major Oregon city. I was making $11/hr, my wife who makes $30 now doing the exact same thing couldn't get $8.
Mix all that with the state run health insurance, distance between hospitals/grocery and how far I had to drive to get to Treasure Island in Fargo ND, I gotta pass.
Though, I'm further away from Treasure Island now, and I think miss the coin shop than I do many other things. It's been 5 or 6 years, I think of them time to time, wonder if Brian ended up following his dreams he was a brilliant kid and always well spoken and polite to me and my wife. Bright dude. Good salesman too.
Also traded metals with a Brian down in the cities 2010-2012, we touch base now and again, neither of us was pleased with the quality of vendors and such in the state. He was born and raised and said it was difficult trying to get affordable coins easily. Told me Apmex and the Internet changed that for him. I guess, until now. Well, 2015. But yea. Gross. So it's about money and power - corporations and politics.
You know, the law sounds suspiciously unconstitutional. Don't get me wrong this is my first time diving down this rabbit hole.
What do the bleeding hearts and apologists say about the law? "Think of the children"? What do you even say?
"here's another way I'm gonna take your money and pacify you, and you're gonna thank me for it. Hear me out..."
Nah, it was a pretend 'we are going to protect you from the bad guys' fake out. Really it was a power grab for a big company to squeeze out the competition. Protectionism and cronyism at its finest.
This.